Chapter 5:
Who Uses Shopper Marketing Insights? Not Just CPG’s Anymore.

Many people associate shopper marketing insights with large retailers and consumer packaged good companies. It is true that what goes on at the point of sale is especially important for purchasing in impulse categories like gum and cans of soda. The final few seconds of the shopping experience account for a large part of their sales and failing to understand them can cost billions of dollars in lost sales – or create them, as Coke demonstrated with the simple idea of putting different names on bottles in store.

But shopper insights are relevant for far more people than just consumer goods manufacturers. Manufacturers tend to focus on increasing their own share of wallet through shopper insights. Retailers are also able to use this technique but for their own purpose – to increase total spend, as well as improve the profitability of basket mix. Indeed, a lot of retailers let manufacturers do shopper insight work in their stores on the basis that they can also access the insights to learn how to grow their retail business.

Understanding the shopping process can work for more complex purchases. Big ticket auto buys involve a browsing process crossing many forms of media and multiple showroom visits. Getting the connection between the showroom and messaging online is crucial. Some B2B transactions also use shopper insights very smartly. From understanding the world of influencing purchase decision makers to understanding insights along the path to purchase, shopper insights can deliver the same impact in B2B as in B2C, for much higher financial reward per transaction.

Also as the Path to Purchase continues to change, every business will need to learn how to understand purchasing behavior.

Are Shopper Insights Right for your Organization?

Just because a lot of companies use shopper insights does not mean that everyone should.

Maybe you are skeptical about whether shopper insights would be right for your organization where there are many competing priorities. A few simple questions can help you get a feel for whether it is worthwhile investing in understanding shopper insights.

First, how well does your team understand your target shoppers? In some companies the answer may be very well. But in most cases, the team does not know shoppers as well as they could. Just because you yourself shop the category does not mean that you have insights into the behavior of shoppers in general. Some of the key questions you should be able to answer are how do shoppers plan their purchase, on what shopping trips do they purchase your product on, how do shoppers shop your category, how engaged are your shoppers and what mindset are they in.

Secondly, what do you want to change about your business? Getting to know how shoppers think, feel and behave can help you maintain your market position, but that may not convince your decision makers that it is worth doing. Instead, shopper research pays for itself best when it is used to aid decision making in business objectives which will go against a clear business goal. That could be as basic as understanding why a product line does better in one retailer than in another, or more complex, such as how to get people to shop for different products in a single trip.

Thirdly, do you understand the overall drivers around your category and brand? Shopper insights are an excellent way of drilling into the detail of what goes on in the retail journey – but in most cases they work best in conjunction with consumer insights. Effective shopper insights help to identify the triggers and barriers to purchasing. Understanding what will engage your shopper at the point of purchase will help to drive those incremental purchases. The triggers can be different throughout one aisle in a store.

Once you decide that Shopper Insights are right for your organization, you will want to establish a plan to manage and execute your shopper insights. Many different approaches can be used, here is an example of one approach for a CPG company.

diagram of a plan to manage and execute your shopper insights

Should You Hire A Shopper Research Agency?

A key question that you might be asking is when should I hire a Shopper Research Agency? While there are many good do-it-yourself tools on the market now, a lot of shopper research involves observing shopper behavior. In order to observe this behavior, shopper research agencies will often go in-store with observers or cameras to measure what is happening. Shopper research agencies bring a very specific expertise and most established shopper research firms will have norms on behavior to measure whether or not the behavior is desirable or not. For instance, a shopper might spend 12 minutes shopping for cosmetics, but if they spent that long shopping for milk it might be a problem. The ability to provide context to behavior is a key reason to hire a shopper research agency.

A good shopper research agency will also have access to labs and tools you probably don’t have. While you can probably execute an online study or do some social listening, it is more difficult to do more in-depth behavioral research where you may need the expertise of a shopper research firm. Most established shopper research firms should have expertise in eye tracking and other biometric tools.

Having shopper labs is also an important feature of shopper research firms. A Shopper lab provides a confidential area to test new products, merchandising or services without having to test in a store environment. Also, most Shopper Labs should be outfitted with cameras, client viewing and have full biometric capabilities. More advanced Shopper Labs also have Virtual Reality capabilities where shoppers can be immersed in different environments.

Here a guide to deciding if you should do it yourself or hire an agency.

Do it Yourself

⦁ Want to quickly validate a tactical idea
⦁ Have limited budget
⦁ Have your own norms and a team that is well-versed in shopper insights and can interpret the data

Hire an Agency

⦁ Have a need for in-depth shopper insights and activations that may take different types of research to uncover
⦁ Need the expertise and normative database of an agency
⦁ Need a team capable of executing biometric research or in-store research
⦁ Have a budget to support marketing research

The decision to hire a shopper research agency needs to be considered with respect to your current understanding of shopper behavior, what types of information gaps you may have and your level of current resources and expertise.

Shopper Behavior Insights Are Not New

Large consumer goods companies have been looking into what shoppers do for decades. The practice of shopper insights gained wider traction in the past twenty years or so.

With many markets reaching maturity and the growth of ecommerce radicalizing shopping channels and pricing, both manufacturers and retailers had to turn to new places for growth. One such move was to embrace shopper insights, as a possible way of improving returns even in a saturated and competitive retail market.

This has led to many new innovations in capturing shopper insights. Leading insight firms to use different tools to measure the subconscious drivers of behavior through technologies such as eye tracking, facial coding, EEG and other implicit techniques.

In Chapter 6 we look at each of the important Shopper Marketing Research Techniques.